Romania confirms 5% VAT rate cut

Romania confirms 5% VAT rate cut

The Romanian Government has now confirmed that the planned VAT rate cut is going ahead, a drop from 24% which is one of Europe’s highest to 19% which is one of the lowest. It has recently been uncertain as to whether the cuts would go ahead due to some political unrest when the opposition accused the Government of going in the wrong direction with the budget and calling for a re-election which would have put the VAT plans in jeopardy.

However earlier this month the Government confirmed the VAT cut was to be implemented by 1st January 2016, and at a greater rate than was expected. In February they announced a cut to 20%, this is based on a quicker than expected return to growth in the country.

Furthermore in addition to this they also confirmed that draft beer will drop from 24% to 9% following in line with the earlier cut to food products.

Yet with this measure potentially impacting the budget revenues by some EUR 2.6 billion both the EU and the IMF have expressed doubts over the sustainability of such deep tax cuts in Romania.

Laura Stockley
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Laura Stockley

Consultant at eBiz Answers Ltd
Laura graduated from University with a degree in Business Studies, and has been working as an Oracle eBTax consultant for several years now, with both R12 eBTax and Fusion (Oracle Cloud) Tax. Focussing primarily on the tax module and its components, Laura also works on the other financial modules and understands how they integrate with the tax engine. Laura has worked on projects with multiple clients covering all aspects of the tax module including AP, AR and GL, working on everything from design, configuration, testing to support. An excellent communicator, Laura enjoys interacting with end users and relishes the challenge of resolving their issues; making tax an enjoyable experience, always.
Laura Stockley
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